Is Your Company Culture Healthy?

Six inquiries leaders can make to strengthen culture

Ann Skeet

Ann Skeet is the director of Leadership Ethics at the Markkula Center for Applied Ethics. Views are her own. This article appeared originally on MarketWatch.

Has it really been more than two years since Ellen Pao lost her case against Kleiner Perkins? True, and based on recent news stories, not much has changed in the venture industry since then. Between the recent, raunchy revelations about what life is like for female entrepreneurs in Silicon Valley and the governance and management failures in other industries like banking and automotive, more board directors might be getting nervous about how best to insure corporate cultures are healthy.

Of course the most direct way to find out is to ask. Many companies are reluctant to do so, concerned that conducting such an in-depth assessment suggests there are problems to begin with; feeling a lack of support from the CEO or board or resistance from other C-suite colleagues; and certain such effort distracts more than it adds to the the business.

One multi-national company headquartered in Silicon Valley used a culture assessment tool we’ve developed, with useful results. This company had a CEO and a lead independent director interested in signaling the workplace about the importance of ethics and a bias towards learning. The discussion at the board meeting reviewing the results extended well beyond the original time allotted. Other boards and management teams can benefit by such assessments. In the meantime, they can ask these questions in their organizations.

What do we know about the character and the values of the organization’s leaders?

Do they match the corporate values? And, how can we know for sure? Does it matter if people in powerful positions behave badly, inconsistently and in pursuit of their own interests over those of the organization? Sure--how employees feel about their leaders influences how they do their work and what level of commitment they bring to it. Yes, some leaders with recognized reputational flaws produce business results but there is an opportunity cost to tolerating badly behaving executives. It remains unknown what the business results could have been if the team was led with integrity.

Has an investment in creating a community been made?

Such tasks like writing mission and value statements are considered too time consuming in many start-up cultures and unlikely to be meaningful in more established ones. It would be easy to skip over this work in many companies. But those that thrive over the long term typically have a history of a strong mission used regularly in daily decision-making. That’s the return on the investment it takes to develop shared values. Once those values are lived, decisions from hiring to product launches can be made more quickly using the team’s common code.

Do we do the basics well when it comes to encouraging ethical behavior?

An entire ethics and compliance industry has emerged over the past 30 years. It’s now weighted heavily towards compliance—minding laws around the world, reducing fines and penalties. Fundamental practices that bring ethics into the spotlight help the cause--relevant, fresh policies, clear codes of conducts and transparent, consistent practices.

Do leaders keep the right interests front and center?

Companies reflect their board’s values. If a board tolerates a leader setting a poor example or allows unhealthy cultures to persist, they are tacitly endorsing them. Boards must relentlessly keep the company’s interests as their highest priority and executives must bring the information and people forward to allow this to happen. Being disciplined in one’s role is a hallmark of ethical leadership and works against boardroom groupthink.

When things go wrong, how does the organization respond?

Stuff does happen. When it does, is there a pause? Do leaders gather information and clarify acceptable practices going forward? Culture is created and held by all people in an organization but leaders can contribute in a special way by creating the space and resources to course correct if need be.

Do the systems we have in place encourage people to behave well?

Intentional systems design helps people perform well and within the norms of their industry and company. Investment in interpersonal systems (mentoring, teambuilding) that encourage healthy relationships between the people in an organization and those at the organizational level creating policies for compensation, hiring, evaluation, expense reimbursements help people behave well. When industry leaders collaborate to address shared goals around sustainability, governance and laws affecting the industry’s performance and potential, it shows in business results.

One of the most powerful moves anyone in the workplace can make is to ask a good question. It can be the start of the conversation that needs to happen and changes that should be made.